White House calls for further heavy-duty truck fuel efficiency standards

Following steps taken in 2011 to mandate new heavy-duty truck fuel efficiency standards going into effect this year and running through 2018, President Barack Obama said this week he is again upping the ante for further fuel economy standards for heavy-duty trucks that will head into next decade.

“Today, I’m directing the Secretary of Transportation, Anthony Foxx, and Gina McCarthy, the Administrator of EPA…to develop fuel economy standards for heavy-duty trucks that will take us well into the next decade, just like our cars,” Obama said at a Safeway Distribution Center in Upper Marlboro, Maryland on February 18 And they’re going to partner with manufacturers and autoworkers and states and other stakeholders, truckers, to come up with a proposal by March of next year, and they’ll complete the rule a year after that.”

The President stressed the fact that the nation wants trucks that use less oil, save more money and cut pollution, and he noted that the White House’s National Clean Fleets Partnership, which was established in 2011 and is focused on helping large companies cut down on diesel and gasoline usage in their fleets by meshing electronic vehicles, alternative fuels, and fuel-savings measures into their daily operations, is now up to 23 member companies, including transportation titans UPS and FedEx.

Specifics of the improved fuel efficiency standards is Obama calling for have yet to be disclosed, but he did note that for in order to have businesses and manufacturers meet the new goals, the White House is offering new tax credits for companies that manufacture heavy-duty alternative-fuel vehicles and those that build fuel infrastructure so that trucks running on biodiesel or natural gas or hybrid electric technology, will have more places to fill up.

When the White House issued its mandate for improved fuel efficiency in 2011, it was estimated that these regulations would add roughly $6,200 to the cost of a $125,000 Class 8 tractor, and it also called for that the trucking industry start to become more efficient—to 6.5 miles per gallon from today’s 5 mpg average for a typical loaded semi-trailer. And for combination tractors it called for up to a 20 percent reduction in fuel consumption and greenhouse gas consumption by model year 2018, with a savings up to 4 gallons of fuel for every 100 miles traveled, with vocational vehicles, including delivery trucks to reduce fuel emissions and greenhouse gas emissions by ten percent in the same period along with saving an average of one gallon of fuel for every 100 miles traveled.

The White House also said that by model year 2018 these heavy-duty standards can save vehicle owners and operators and estimated $50 billion in fuel costs and save a projected 530 million barrels of oil or more than the U.S. imports in a year from Saudi Arabia.

While industry stakeholders were largely positive about what the White House proposed back then, some appear to have taken a bit of a more guarded approach this time around.

“We stood shoulder-to-shoulder with the President and his administration in 2011 when the historic first fuel efficiency standards were set for heavy-duty vehicles,” said American Trucking Associations (ATA) President and CEO Bill Graves. “As we begin this new round of standards, ATA hopes the administration will set forth a path that is both based on the best science and research available and economically achievable. Fuel is one of our industry’s largest expenses, so it makes sense that as an industry we would support proposals to use less of it. However, we should make sure that new rules don’t conflict with safety or other environmental regulations, nor should they force specific types of technology onto the market before they are fully tested and ready.”

Using the past as prologue, Kevin Smith, president and CEO of Sustainable Supply Chain Consulting, said that efforts to regulate diesel carbon emissions over the last decade have actually hurt fuel efficiency and increased the cost of equipment and created another gap for carriers to fill in their efforts to remain profitable.

“Fuel is a major component of operating cost and a necessary focus of every carrier in order to maintain profitability,” explained Smith. “It is in their best interest to be as fuel efficient as possible. But, can the government do a good job of regulating efficiency? It is unlikely given their track record. We have been trying to improve automobile fuel efficiency, in part through government regulation, since 1974 when the Department of Energy was formed ostensibly to reduce our dependence on foreign oil. Forty years and billions of dollars of bureaucracy later, we have made some progress. But, it was not through regulation so much as market forces. As the cost of gasoline went up, people sought out more fuel efficient vehicles. Overall fuel efficiency is better than 40 years ago because dependable technology became available and affordable.”

He also noted that there is a possibility the new rules will not be beneficial to carriers and shippers as they night be onerous and may include requirements for alternative fuels or overly expensive engine alterations or some type of proprietary technology that allows little or no opportunity to pursue competitive advantage.

“The government should let the industry seek out efficiency and provide incentives or rewards for successful execution rather than trying to regulate better fuel efficiency,” said Smith.

February 18, 2014

About the Author

Jeff Berman, Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

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